Saving for a child

• Secure your child’s future

  Saving for a child is a valuable gift for the future. Even a small regularly saved amount will grow into a nice nest egg over the years for studies, a new car or the first home

• Systematic investing in a mutual fund

  The time horizon of saving for a child is long. Considering that money in an account hardly generates interest, it pays therefore to make funds grow in a mutual fund whose expected return is markedly higher than in the bank account.

• Better return for long-term saving

  The compound interest phenomenon ensures that money works for your. The earlier you start saving for you child, the more you will gain from the compound interest phenomenon 

How to start investing in mutual funds for your child

1. Open a current account for your child

   Saving for a child requires opening a current account for the child to which both the child and the guardians have access rights. To open the account, the child’s personal identity code and name are needed. If the child is a minor, consent from both guardians is needed. Please note that you cannot open an account for an unborn child.

2. Accept agreements

   Before any funds and other investment products can be bought, the guardians must accept the OP Savings and Investments Agreement and the opening of custody for their child. The most convenient way to start saving is on our service. Then we will send you the agreement for your approval through our Electronic Signature Service.

3. Start saving

   When you have opened the account and approved the agreements, it is time to start saving for your child. You can make one-time fund subcriptions or invest systematically using your own OP user ID.

If you like, you can also book an appointment for an online meeting or at a bank branch to go through your options. If the guardians are unable to make the meeting together, we recommend one of them sending a consent with a power of attorney over the eServices for the opening of the child's account and the starting of the saving. The guardian present at the meeting can then activate the services for the minor on their own.

The funds in the name of the child are the property of the child. The child's guardians have a management right to the funds, but the law lays down stipulations on their use

Better return for long-term saving

The parents can put money into the child’s account, and money gifts given by grandparents and godparents can also be put into it. It pays to transfer savings from the child’s account to savings products with higher expected return, such as mutual funds. There are two ways of investing in the fund: the guardian may use their own bank account to subscribe for fund units for their child or the guardian may use directly their child’s account to invest in the fund. 

The amount invested monthly in the units of a mutual fund is the most popular way of saving money for the child. You can determine the amount yourself – there is no minimum amount and you can always change the amount. You can also transfer a lump sum to the fund a few times in a year if systematic investing is not possible.

The saving method should be chosen based on when the intention is to use the funds. The funds invest their assets in fixed-income and equity markets and offer the saved funds decent diversification and the opportunity for a long-term return. The larger the proportion of equity investments in the fund, the higher the expected return. The time horizon for saving for the child is long. This means that equity funds offer the best opportunity for returns. For example, it is easy to choose a suitable option for your child from the saver’s funds and the sustainability themed funds. If you wish to invest all funds in equity markets, index funds are a cost-effective investment option.

Saving through insurance for children

A unit-linked insurance is the best option if you are saving for the child in the long term and wish to maintain control of the funds. You then first save for a unit-linked insurance that is in your name. The child is the beneficiary of your insurance, and will receive the money later as a donation. You can also enter more than one child as a beneficiary of the same insurance.

The OP Unit-linked Insurance, for example, is a good option for saving through insurance.